چکیده انگلیسی

This paper aims to identify which personal features of customers may determine their likelihood to join a grocery retail loyalty program. We consider five aspects: price sensitivity, search for variety, shopping enjoyment, attitude toward loyalty schemes, and one personality trait: privacy concerns. Some of these variables have already been explored in the literature. Where our research breaks new ground is in establishing the difference between profiles of customers attracted by two of the most common types of loyalty programs currently used by grocery retail firms: a reward program and a loyalty card. The two kinds of program evidence differences in how they are managed, and we posit that the drivers of likelihood to take part in each are different. The study was carried out using logistic regression with a sample of 600 clients of a Spanish supermarket chain. Findings show that one particular type of customer is more likely to take part in these schemes: those displaying little shopping enjoyment, who are greatly concerned with privacy, and who show a favorable attitude toward loyalty programs in general. Furthermore, as expected, differences were observed between drivers of participation likelihood in reward programs and loyalty cards.

مقدمه انگلیسی

The increasing importance of customer loyalty has in recent years led to the mass introduction of loyalty programs by businesses in a range of sectors. Service stations, airlines or supermarkets are just a few examples of areas where this marketing tool is applied. The bulk of academic research on loyalty programs focuses on exploring the consequences of implementing these programs. Variables used to measure loyalty scheme efficiency include: store sales or performance (Lall and Bell, 2003, Reinares and Reinares, 2005 and Leenheer et al., 2007), customer purchasing behavior at the store – such as frequency of visits or share-of-wallet (SOW) – (Meyer-Waarden and Benavent, 2006b, Mueller, 2007 and Kim et al., 2009) or affective responses, such as customer satisfaction or trust in the retailer (García et al., 2006, Schijins and Daams, 2007, Yuping, 2007, Bridson et al., 2008, Demoulin and Zidda, 2008, Demoulin and Zidda, 2009 and Mimouni and Vollé, 2010).
Another line of inquiry linked to loyalty programs aims to reveal subjects' characteristics which may determine their participation therein. Work conducted in this line of research seeks to answer two questions: which clients at the store adopt new programs more quickly, those who are more loyal or less loyal, and, which characteristics make individuals more prone to adopt a loyalty program, perceptions, attitudes, behaviors, sociodemographics. The answers to these questions will prove extremely valuable to managers responsible for introducing loyalty programs in retail stores, as they will help to gauge the usefulness of such programs and to define future schemes that more closely reflect the drivers identified.
Research conducted to date exploring determinants of loyalty program participation follows one of two strands, depending on the variable analyzed (Demoulin and Zidda, 2009) adoption timing or adoption likelihood. As regards studies exploring adoption timing, some authors hold that loyalty program enrollment may reflect an innovation adoption, these studies being based on Rogers' innovation diffusion theory (1983) (Meyer-Waarden and Benavent, 2003, Meyer-Waarden and Benavent, 2009 and Demoulin and Zidda, 2009). All studies into speed of program diffusion amongst store clients draw on panel data and concur that loyalty programs with long-term cumulative rewards attract heavy store purchasers first (e.g., those with larger mean basket sizes, those with greater share-of-wallet), because they buy enough to expect quick and substantial benefits in relation to cost. Late adopters display lower purchase levels as they expect lower program utilities and higher associated costs (Mueller, 2007, Meyer-Waarden and Benavent, 2003, Meyer-Waarden and Benavent, 2009 and Demoulin and Zidda, 2009). The results of Meyer-Waarden and Benavent, 2003 and Meyer-Waarden and Benavent, 2009 state that adoption timing is also influenced by certain sociodemographic traits such as social class, age, and the number of loyalty cards held. Demoulin and Zidda (2009) demonstrate that customers' commitment to the store, the number of loyalty cards customers own and the distance they must travel to the store significantly affect adoption timing.
Regarding the study of customer adoption likelihood, previous research has examined the differences between cardholders and non-cardholders and has elaborated on those differences to infer potential adoption drivers (e.g., Galguera et al., 2006; Leenheer et al., 2007, Mueller, 2007, Demoulin and Zidda, 2006 and Demoulin and Zidda, 2009). It is worth highlighting that the works of Demoulin and Zidda, 2006 and Demoulin and Zidda, 2009 also base their approach on the innovation diffusion theory. Determinants of adoption likelihood dealt with in the literature include: relationship proneness (e.g., Mueller, 2007), demographics (e.g., Demoulin and Zidda, 2006 and Demoulin and Zidda, 2009; Galguera et al., 2006; Mueller, 2007), perceived attributes of the new loyalty card (e.g., Demoulin and Zidda, 2006 and Demoulin and Zidda, 2009), attitudes toward loyalty programs in general (e.g., Demoulin and Zidda, 2006) or attitudinal loyalty toward the retailer (e.g., Demoulin and Zidda, 2006 and Demoulin and Zidda, 2009). The works of Leenheer et al. (2007) and Demoulin and Zidda, 2006 and Demoulin and Zidda, 2009 also evidence the self-selection bias according to which loyalty program members are already behaviorally loyal to the store and are among its best customers.
In sum, studies seeking to pinpoint adoption timing and adoption likelihood concur on one finding that is a key to understanding how grocery retailer loyalty programs function and therefore their utility: loyalty programs select the most valuable customers of a retailer and, thus, serve as a tool to reward established purchase patterns (Magüi, 2003). The same conclusion has also been reached in other research (e.g., Wright and Sparks, 1999, Kim et al., 2001, Demoulin and Zidda, 2008, Meyer-Waarden, 2002 and Meyer-Waarden, 2006a among others). Yet, as the literature has shown, client loyalty to a store is necessary although in itself is not enough to ensure participation in grocery retailer loyalty programs. The present work analyses five characteristics of store clients which may impact likelihood to join loyalty programs: price sensitivity, search for variety, shopping enjoyment, attitude to loyalty schemes in general and personality traits—privacy concerns.
The contributions to the extant literature made by the present work are the following.
First, bearing in mind that price sensitivity, search for variety and shopping enjoyment form part of consumer shopping motives, we draw on the motivation theory to explain how they influence a retail store's likelihood to hold a loyalty program. This theoretical approach has to date not been used in the literature exploring determinants of loyalty program adoption. Second, all studies examining determinants of adoption likelihood or adoption timing have been based on grocery retailer loyalty cards. In some instances, this is a new loyalty card recently launched by a retailer (e.g., Mueller, 2007, Demoulin and Zidda, 2006 and Demoulin and Zidda, 2009) whilst in others panel data is used covering grocery purchases from a sample of consumers over an area that includes several retail stores and therefore various loyalty cards (e.g., Galguera et al., 2006; Leenheer et al., 2007 and Mueller, 2007). In the present work we consider a loyalty card and a reward program employed by a chain of Spanish supermarkets. These are the two most common kinds of programs in the food retail sector worldwide and evidence certain differences in how they are run (e.g., reward programs operate for a limited period and consumers are not required to provide any information if they wish to participate, whilst loyalty cards work in totally the opposite way). Our proposal is that because of these differences, drivers of likelihood to join those loyalty programs differ.
This work draws on a sample of 600 supermarket chain customers located in a city in central Spain with nearly 500,000 inhabitants, and comprises subjects who participate in the store's loyalty program as well as those who do not (i.e., loyalty card and reward program). As a result, in the present work, the dependent variable considered is likelihood to join the loyalty program. We used logistical regression to analyze the impact of the five personal traits dealt with in the work concerning likelihood to join a loyalty program (both in general and for each kind of program).
The findings to emerge allow us to draw up a profile for the segment of a store's customers who join general loyalty programs as well as for each individual scheme in place. This information has particular relevance for firms since it provides a clearer insight into how they work and in some instances may guide them with regard to what action to take in an effort to encourage most of the store's clients to join the loyalty programs.
The paper is organized into the following sections. In the first section, we review the literature addressing drivers of adoption likelihood and outline the proposed hypotheses. We then explain in detail the methodology used in the research and the findings to emerge from the analysis carried out. The paper ends by discussing the main conclusions drawn, together with a number of recommendations for business management.

نتیجه گیری انگلیسی

Loyalty programs are marketing tools used by most grocery retailers, the most common schemes being loyalty cards and reward programs. The extant literature exploring drivers of participation in loyalty programs (retail store loyalty cards) concurs in one particular finding which highlights how these marketing tools work: loyalty programs select a firm's most valuable customers, and are thus a strategy for retaining existing clients more than a means of capturing new ones. Yet, although being a loyal client in terms of sales is necessary, it is no guarantee that a client will join a loyalty program. Certain personal traits may also influence people's decision to join a program. Based on this premise, the present work focuses on the following determinants of the likelihood to join grocery retail loyalty programs: price sensitivity, search for variety, shopping enjoyment, attitude to loyalty programs and personality traits—privacy concerns.
The results of our research reveal that there are factors which prompt clients to join grocery retailer loyalty programs whilst other factors discourage them. Of the characteristics analyzed, shopping enjoyment motivation, perceived disadvantages in schemes, and individuals' desire for privacy act as inhibiting factors which deter participation in loyalty programs as a whole. First, contrary to what was posited in the hypotheses, shopping enjoyment motivation emerges as a barrier to consumer participation in loyalty programs which require a certain level of behavioral commitment toward the retailer in question. Second, the perceived disadvantages associated with participation curb the decision to participate if customers have an unfavorable opinion of programs because they view them as too demanding in terms of what is required to obtain the reward, or because they feel that such programs only benefit the company. Finally, individuals' desire for privacy is another aspect we identify as a negative factor in participation. Customers who are more cautious about their privacy are by nature more reluctant to participate in programs which require them to provide personal data. In this regard, it should be remembered that many loyalty programs are launched specifically to satisfy the grocery retailer's need to secure information concerning customer habits and behavior.
As regards factors encouraging participation, we only find the perceived advantages associated with the programs. In the same way as negative opinions are related to a rejection of programs, so positive opinions are linked to a desire to take part. Consequently, subjects willing to take part will be those who consider a grocery store to be more appealing due to the launch of a loyalty program and who conceive loyalty schemes as a means for companies to recognize and reward their best customers. Those who feel that the information gathered by the company will also, although not exclusively, be used to benefit the consumer are also likely to join.
The study's findings indicate that price sensitivity and search for variety prove irrelevant when accounting for customer involvement in grocery retailer loyalty programs as a whole. In our attempt to explain the lack of significance of price sensitivity, we wonder whether this variable's effect may have been masked by the perceived economic advantages arising from participation in loyalty schemes, which emerges as a determining factor. Indeed, we suspect that the most price sensitive customers will tend to value program advantages more positively and will, therefore, eventually be more willing to take part. We will need to demonstrate, therefore, whether the relationship between price sensitivity and the decision to participate is indirect and whether it is indeed mediated by the perceived advantages. In terms of negating the role of the search for variety as an incentive to participation, we believe that this may be justified due to the characteristics of the sector under study. Search for variety is not a consumer motivation evident in the purchasing decisions for food and household goods. For instance, in the sample used in the work conducted by Meyer-Waarden (2008), it emerged that both members and non-members shopped, on average, in 2.5 grocery stores. As a result, variety seeking fails to impact the likelihood of joining a grocery retailer loyalty program either positively or negatively.
In order to gain a deeper insight into drivers of participation in loyalty programs, we study separately participants of reward programs on the one hand, and for loyalty card programs on the other. In the case of reward programs, the only variable which explains participation is perceived program advantages. This seems logical if we consider the nature of such schemes, which offer participants the chance to obtain tangible rewards in the short term. It also seems logical to assume that shopping enjoyment and the search for variety do not emerge as shopping motives affecting participation in a reward program, as the latter only require customers to change their shopping behavior for a relatively short period. Once the reward is obtained, customers may return to their usual purchase pattern. The lack of explanatory power of the perceived disadvantages associated with such programs in general is also understandable, as customers perceive few disadvantages in a reward program. Unlike other programs, which demand greater customer commitment, the only effort required in a reward program is for participants to shop at a store on a temporary basis, collect the necessary points and present the duly completed points card. Finally, we find it equally understandable that individuals' privacy concerns should have no negative effect on the decision to participate in a reward program, as they do not require the individual to provide personal data.
As regards loyalty cards, however, things are very different. All the variables which determine the level of participation in general (shopping enjoyment, perceived advantages and disadvantages, and privacy concerns) now reappear as explicative of the likelihood to take part in a loyalty card program. Shopping enjoyment negatively influences the likelihood to join a grocery retailer loyalty card program. However, unlike before, consumer search for variety does appear to be significant here and to have a negative influence. The interpretation is that individuals who are motivated by variety seeking are less likely to take part in loyalty schemes which adopt a long-term focus and offer deferred rewards.
From the findings to emerge, we may deduce the following. If we look at the results of the three regression models taken as a whole, we see that the variable evidencing the greatest weight in the decision to participate in grocery retail loyalty programs is perceived advantages of taking part. This seems logical if we consider the stimulus-response pattern behind loyalty schemes. In other words, individuals will decide to take part provided they perceive that programs can help them to reap some kind of benefit. It is therefore the favorable attitude of the individual toward these schemes which determines the decision to take part therein.
In sum, grocery retailers need to focus their efforts on designing loyalty programs which contribute to improving the perception that consumers have thereof. To attain this objective is necessary to offer a variety of incentives to consumers, comprising tangible (i.e., product price reductions or gifts) and intangible rewards (preferential treatment, information, or the possibility to interact with other participants virtually by social networks of in the real world in events). Loyalty programs' success therefore depends strongly on the value a system of gratification offers as buyers adopt a scheme, change their buying behavior, only if they judge the value as higher than the associated costs (joining expenses, personal data offered, switching costs) (Meyer-Waarden and Benavent, 2007).